# How States can Implement the Standardized Modified Adjusted Gross Income (MAGI) Conversion Methodology from State Medicaid and CHIP Data. Converting "Add-On" Amounts

In some cases, states have an â€œadd-onâ€ amount that can be applied for family sizes that exceed a certain level, which may vary by state and eligibility category. Similarly, the federal government publishes an FPL add-on amount for households of more than 8 persons for 100% FPL. To convert the state add-on amount, we add the average disregard amount calculated in Step 3 to the state add-on amount, expressed as a percentage of the federal add-on amount. Specifically, to convert the state add-on amount we use the following formula:

where both state and federal add-on amounts are expressed in monthly (as opposed to annual) terms. Rearranging, the add-on conversion simplifies as follows:

In the hypothetical case illustrated in Tables 5 through 7, the state has published eligibility standards for family sizes of 1, 2, and 3. Assume that, for family sizes greater than three, the state adds a fixed amount of \$150 per person. In 2012, the federal add-on amount under the FPL guidelines was \$3,960 annually, or \$330 per month for 100% FPL. So, in our example, the state add-on amount converts to \$150 + (0.078*330) = \$176.

Note that the federal poverty levels and add-on amounts must correspond to the year of data used by the state. Since our examples above apply the 2012 federal poverty guidelines, we are implicitly assuming that the underlying data used in our hypothetical examples reflect state enrollment in 2012.

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